If you start with book trade-in values, what's reasonable profit to make on top?
I reckon selling a £500 car for £2,500 is taking the mickey...
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Aim for £1000 profit per car, so that (assuming you are legit) you maybe have 200-300 quid in your pocket after everything has been paid for/tax/VAT sorted.
Those school fees don't pay themselves.
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If you buy a used car for £1500 from a trader, I bet he didn't pay more than £800 for it.
For new cars, sometimes profit margin is less than £500 though (to achive target and dealers often make more money on accessories/finance etc.)
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My experience at this end of the market: traded in a Mondeo for £1000, appeared on same forecourt a week later for £2000. Traded in another Mondeo a year or two later for £500, it appeared in Autotrader soon after for £1750 with a driveway trader. I'd only paid £1200 for it myself 6 months earlier.
Who knows how much each actually sold for though?
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It varies. I remember years back in 2000 there was an A4 diesel estate on the forecourt for £14995. I overheard a converstaion between the salesmen having a laugh at the customers who were very pleased at getting £500 off - they had a full £7k margin in the car.
Any trader who says they dont make much is either bad at their job or a bareface liar, even the backstreet ones make big margins, I know, ive seen the balance sheets.
Place I did work for was making an easy £20k a month profit on old german stuff under £15k.
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I don't doubt your word, Stu, but I'm amazed a £15k car could have a £7k margin on it! I would expect it to be more like £2-3k at that price level.
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I think most traders aim for at least £1,000 gross.
Some would deal at that level, but many would not take a part-exchange if the margin on the incoming car was going to be much under £1,000.
The numbers were much smaller when I was in car sales, and the margins were tighter than most people imagined.
If we made a balls of pricing a part-exchange, which happened rarely, there would be no option but to sell the car at a loss.
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Wasnt my word so much as salesmen who love to boast about their conquests at customers expense.
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>> Wasnt my word so much as salesmen who love to boast about their conquests at
>> customers expense.
And you believed them?
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Talking amongst themselves, yes, they all know how much money is in each car, I was in the key cupboard ( great place for hearing goissip ).
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Looked at a car for 2 weeks - £14,800, 1st March it is now £15,400....................catching the March 1st trade-in "bargain hunters" although it has been for sale for a few weeks.
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most of them do it for the love and goodwill to all men
i hear a couple i know are even asking for registered charity status but now labour have lost overall control of the country this will have to wait till hell freezes over
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Have to say I don't mind any retailer of anything making a fair profit. If their businesses prosper, they pay their suppliers, themselves and their staff. They in turn pay tax and buy things. Kinda how it works really. Shafting retailers down to the bone will eventually hurt everyone. Of course we shouldn't spend our hard earned at mickey taking emporia but I don't grudge any business a fair return on a fair product. Good luck to them and us.
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Exactly. You deal with them and agree to sell/buy cars to/from them at your own free will.
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After 20+ years in retail, you sell at whatever the market will stand to pay. Somethings you make a big mark up on. At other times you sell at considerably less than cost in order to clear stock.
Where I work now we are selling a good few dozen lines at well under our initial purchase price just to improve cash flow and make room for incoming Spring & Summer stock.
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Saw a Dodge Ram on a forecourt a good while back for sixteen grand. A little optimistic for a 2003. Same motor on same forecourt the other week for a fiver under ten grand.
I'll hang on till petrol gets to £1.40 a litre then bid three grand for it.
Or perhaps not :)
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In January 2010 we visited friends who live near Tahoe, and planning to ski a lot requested a mid size 4 x4 so as to get through 'chain control' on Highways 40 & 50 without having to stop and take chains on & off.
We were 'upgraded'to a Dodge Ram Big Horn,. 5.7 litre V8 Hemi with crew cab.
Even on winter tyres it was almost too powerful, but driving it made our holiday.
Great fun in the right environment.
In the UK I would not be seen driving one.
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Skiing at Tahoe was the main reason my brother got a Jeep Grand Cherokee 5.2 V8. He does't ski at Tahoe now so no need for the 4x4 either. It's long gone.
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When we went skiing in Mammoth a few years ago, the car renters at the airport were saying "bad snow on the pass - you'll be needing to upgrade to a 4x4" It was mega dollars, so we declined, and stopped at the first gas station to buy some chains for our econobox. There were 3 of us plus luggage cooped up in a horrid Chevrolet. Driving it on the chains was not a nice experience - but a lot cheaper than a 4x4 upgrade!
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How much profit do traders make on a car - Lygonos
