What Mark Up on Cars in Garages??

slumped

Hi All,

Just wondering what mark up a car dealer (used) might have on a car they are selling for €15,000??

Assuming they took it in as a trade in, what would the car 'cost' them??

Ta.

S

crosstownk

It varies from dealer to dealer. Some could making in excess of €2k while others may be making less than €500. If the car has been in stock for some time then it may be sold at break even just to see the back of it. It depends on the deal made when trading in, what work needed to be done to make it saleable and how much is put away for warranty. It also depends on the car itself and how difficult it will be to shift.

colm_mcm

yeah, it's easy to ignore the cost of servicing, tyres, valeting, advertising, and warranty. Of course there's profit in it, but it's not as massive as some people think.

milltown

I traded a car to a dealer last month. He gave me €11.5k and he has it up on Carzone at €14.9k. No pictures but he describes it as like new. I reckon there was at least €500 of dentmaster work needed to get 6 years worth of trolleys and car park dings out, nothing major but there were quite a few. The paintwork was poor enough when you got up close so I reckon he may have resprayed it (also because it took about a week and a half to go on sale and mechanically it was 100%).

That wouldn't leave him much change from €2k so if he gets the sticker price he's made €1400. On the debit side, he may never get his full price, he has his overheads to look after, he may be looking at it for a while and have to pay interest. I reckon if he makes a clean €900 out of it he'll be happy, and I'm happy 'cos I didn't have to spend any time selling my car and dealing with muppets, test pilots and tyre kickers coming to my house.

milltown

crosstownk wrote:

It varies from dealer to dealer. Some could making in excess of €2k while others may be making less than €500. If the car has been in stock for some time then it may be sold at break even just to see the back of it. It depends on the deal made when trading in, what work needed to be done to make it saleable and how much is put away for warranty. It also depends on the car itself and how difficult it will be to shift.

Funnily enough, when I was changing my car I went to look at one and had someone in the trade make a trade enquiry about it too. The guy had had the car a few months but hadn't got much of a margin on it so needed very close to the asking. It wasn't the cleanest example I'd seen but if the price was right I could deal. He took a look over mine and took my number and said he'd ring me later with a deal. Noticed he also had another enquiry on his desk about the same car. Waited a week for a call, nothing. Sent two e-mails, no reply. That was in September and the car is still in his stock. I wonder why?!!

slumped

thanks guys for that so far.

Would have thought that 15000 car would have been given a trade in value of 10k - 11k

Any dealers out there??? Let us in on trade secrets!

S

peasant

slumped wrote:

Any dealers out there??? Let us in on trade secrets!

S

and in 24 days, if you keep perfectly still and stay awake all night, you will see Santa sliding down your chimney

Sizzler

On a slightly related subject a mate if mine was working in Toyota HQ and they were buying in Celicas for €10K :eek: before they were then sold onto Toyota dealerships around the country, this was a few years ago when a Celica was costing the average punter the wrong end of the 30K bracket! Nice !

drdre

Sizzler wrote:

On a slightly related subject a mate if mine was working in Toyota HQ and they were buying in Celicas for €10K :eek: before they were then sold onto Toyota dealerships around the country, this was a few years ago when a Celica was costing the average punter the wrong end of the 30K bracket! Nice !

WOW thats cheap, can you get me one:D

unkel

milltown wrote:

I reckon if he makes a clean €900 out of it he'll be happy

Depends on the car but chances are he'll be very happy to take a lot less than that. Even sell at a "loss" once ads, repairs, valeting, warranty, service, etc. are taken into account

A buyer sees the trade-in price as the "value" of their trade-in. Not a dealer. He sees the trade-in price as the value of the trade-in plus the discount he is willing to give on the car the buyer is getting

milltown

unkel wrote:

Depends on the car but chances are he'll be very happy to take a lot less than that. Even sell at a "loss" once ads, repairs, valeting, warranty, service, etc. are taken into account

A buyer sees the trade-in price as the "value" of their trade-in. Not a dealer. He sees the trade-in price as the value of the trade-in plus the discount he is willing to give on the car the buyer is getting

Not in this case. I sold him my car for cash so I could have a stronger hand negotiating with a different dealer for the car I was buying. Plus, he was offering €1.5k more than I was offered as a trade in from the other dealer!

crosstownk

slumped wrote:

Any dealers out there??? Let us in on trade secrets!

There are no secrets. It's a popular myth that the the sale of each car yields thousands for a dealer. The trick is to sell many at a cheap price rather than one for a killing. Although thats hardly a secret.................

unkel

milltown wrote:

Not in this case. I sold him my car for cash so I could have a stronger hand negotiating with a different dealer for the car I was buying. Plus, he was offering €1.5k more than I was offered as a trade in from the other dealer!

So you actually sold your car to a dealer for more than the book value of the car? :eek:

Fair play to you! Out of interest, what car was it and what dealer did you sell it to?

leon8v

Sizzler wrote:

On a slightly related subject a mate if mine was working in Toyota HQ and they were buying in Celicas for €10K :eek: before they were then sold onto Toyota dealerships around the country, this was a few years ago when a Celica was costing the average punter the wrong end of the 30K bracket! Nice !

Chances are Toyota were only making about 2-3k max on that celica. Yes they buy them in for €10k but by the time you add all the delivery charges etc, sell onto dealer, add VAT, VRT, delivery to dealer etc, it all adds up and gets a lot closer to the retail price.

MercMad

I used to sell cars for a living, mundane stuff initially from a main dealer. We looked at trade in the following way,

Decide on a reasonable attainable selling price, in other words a few hundred under the current going rate for the same car. This would be based upon our own experience of similar models, and also the little book value, though we paid less attention to the book than dealers currently do. Anyway if someone showed up in a 3 year old Corolla/Megane/Astra/XYZ or whatever we would price it up the following way,

New XYZ List price € 20,000 ( cash price 18,500)

3 year old XYZ ......we estimate we could eventually get 13,000 cash for it, so 13000 less 5% profit = 12350. Cost of servicing and repairs, in this case we'll assume 500, though in reality we would price this up accurately, including tyres and paintwork repairs.Dont forget this was 10 years ago so salesamen had to be more competative because the market was bigger for used cars, nowdays they are apin for most volume dealers.

Anyway 13,000 less 500(profit) less 500(repairs) left 12,000. Therefore if the cash price is 18,500 less 12,000, then it will cost 6,500 to change, effectively giving the customer €13,500 for the car. This was generally in tune with asking prices and we would then do the repair work an put it on the forecourt for €13,500. We had a €500 discount or trade in allowance !

Simple as that !

We would have made about €800 on the new car, less PDI charges, adverstising blah blah.........

Dealers are more greedy now and want the fast buck and since there are much more cars out on the roads the actual book value is used more often and this is based on a monthly depreciation % which has been reasonably calculated by the bookmakers. I hated the book because it did not distinguish between a superbly looked after car in the right colour, and a hacked about example of the same car finished in white.

The world has changed, buyers of new cars get screwed and buyers of used cars get better bargains in most cases !

milltown

unkel wrote:

So you actually sold your car to a dealer for more than the book value of the car? :eek:

Where did I say that? You'll tire yourself out jumping to conclusions!
What I said was he offered me considerably more than the other dealer. It's obvious from his derisory offer that the other guy wasn't overly keen on taking my car as a trade in. The way it worked out I got a better deal on my old car and went, cash in hand, to the bargaining table to buy my new car, and got a better deal there too.

unkel wrote:

Fair play to you! Out of interest, what car was it and what dealer did you sell it to?

Car was a BMW 318i auto. I'm not going to name the dealer. Wouldn't be fair. We both got what we wanted out of the deal and he's entitled to make a turn on my old car without hagglers telling him how much he paid for it.

unkel

MercMad wrote:

Anyway 13,000 less 500(profit) less 500(repairs) left 12,000. Therefore if the cash price is 18,500 less 12,000, then it will cost 6,500 to change, effectively giving the customer €13,500 for the car

Makes perfect sense. Got the impression too that more recently the second hand market is not as good for dealers as it used too

milltown wrote:

Where did I say that? You'll tire yourself out jumping to conclusions!

LOL, re-read the thread and understand you know. Sorry!

colm_mcm

Sizzler wrote:

On a slightly related subject a mate if mine was working in Toyota HQ and they were buying in Celicas for €10K :eek: before they were then sold onto Toyota dealerships around the country, this was a few years ago when a Celica was costing the average punter the wrong end of the 30K bracket! Nice !

does this include VAT, VRT, or shipping?

E@gle.

my dad won a ford focus ghia in the credit union and he had no choice in taking cash had to take the car. The garage he was going to collect the car in said they would only give him 21k for it cos thats what they buy them for and the car is over 25k new.