How Much Do Car Dealers Really Pay For Cars?

What should you not say to a car salesman?

10 Things You Should Never Say to a Car Salesman“I really love this car”“I don’t know that much about cars”“My trade-in is outside”“I don’t want to get taken to the cleaners”“My credit isn’t that good”“I’m paying cash”“I need to buy a car today”“I need a monthly payment under $350”More items…•.

What time of year is best to buy a car?

Looking for a deal on a new car? The absolute best time to buy is December, but you can save big other times too.

How much can you typically negotiate on a used car?

If you’ve discovered that the used TMV for that car is actually $12,000 (dealer retail), you can start by offering a bit under TMV: say, $11,700. Don’t worry if the salesman acts insulted; it’s just part of the negotiation process. Starting lower leaves you some wiggle room to negotiate.

Do car dealers lose money on used cars?

Commissions are also paid on used car sales, and the longer a vehicle sits on the lot, the less it’s worth. More studies from NADA recommend that used cars sell in 45 days or less. If they sit longer, they are losers.

How much do car dealers make per used car?

“We make money on everything though, and that includes parts, service and the car sale.” Industry estimates put dealership per-car profits at just over $2,000 per vehicle sold, even though dealers tend to lose about $200 per car over their cost to purchase it.

How much discount do dealers get on cars?

Yes they do. Depending on the manufacturer, it can range from 1% to 3% below invoice. With some manufacturers, it’s almost as good as for the employees of car makers. Dealership employees may also get discounts on used cars, but that’s the sole discretion of the dealer.

Is it cheaper to buy a car from a dealership?

It comes at a cost Dealers have to cover their margins and ensure they make a profit, so buying through a dealer is almost always more expensive than buying privately.

What is the typical markup on a used car?

It depends. In terms of discount it depends on what they paid for the vehicle in the first place via a trade in or wholesaler. I’ve found there is generally very little margin in used car sales, meaning that 9% and even 6% could drop the value below the dealer’s purchase price.

What is a fair profit for a used car dealer?

The average car buyer believes that car dealers make about a 20% profit on the sale of a $30,000 car, but believe that a 10% to 12% profit is actually fair.

Why you should never pay cash for a car?

The common thinking is that buying a car with cash is better than financing because you won’t have to pay interest. … In that case, paying with cash may not be the smartest thing to do because you’ll lose very little money by financing; you get to keep your cash for other projects or investments.

How much can you knock off a used car price?

According to iSeeCars.com, used car dealers cut the price on the average vehicle between one and six times over that 31.5 day listing period. The first price drop is significant — the firm says that the price drops, on average, by 5% the first time the dealer rips the old sticker off the car and pops a new on.