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How Much Profit Should A Car Dealer Make?

677 messages,  Last post on Jun 16, 2009 at 12:34 PM

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What is this discussion about? Car Buying


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#649 of 677
Re: profit [fonefixer] by thefullmonty
Jun 12, 2009 (5:54 am)
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Replying to: fonefixer (Jun 11, 2009 12:34 pm)

The original question of "how much profit should a dealer make" for me is none. There should be an option to buy direct from the manufacturer. Not once has a dealer EVER added value to the purchase of a vehicle in my case; and I have friends and relatives in the trade. I usually work it out to where I can get the vehicle right off the truck. I do all the work to get it ready to roll (including removing protective polyolefin, clearing codes, topping fluids, etc). Truly, no need for a dealer.
Having said that, 99.9% of the people out there are not like me. They need their hand held, things explained to them, someone to walk them through the process. For them, a dealer should make the value they add to the equation. But, I think a flat rate would be more deserving than a percentage. State that flat-rate up front and you'll have people flock to the dealership. In other words - just be upfront and honest, sell on volume, and stop trying to squeeze every nickel out of the deal (talking to dealers here). Same with consumers, the car costs X, there's $500 (made up profit number) for the dealer, your car is worth X (no negotiating, take it or leave it or sell it on your own); done deal. Too bad people are greedy and it'll never happen.
#650 of 677
Re: profit [thefullmonty] by ingvar
Jun 12, 2009 (6:07 am)
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Replying to: thefullmonty (Jun 12, 2009 5:54 am)

The original question of "how much profit should a dealer make" for me is none. +1. I need a car, I don't need "trainings and explanations".
#651 of 677
Re: profit [thefullmonty] by kirstie_h HOST
Jun 12, 2009 (6:11 am)
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Replying to: thefullmonty (Jun 12, 2009 5:54 am)

That strategy didn't exactly work miracles for Saturn.
 
I prefer the personalization of the dealership experience. Last time I went vehicle shopping, my salesperson showed me a vehicle I hadn't previously considered, and it ended up representing a better value for me and a better long-term fit for my needs. Your method is great for people who know exactly what they want, but most people don't right off the bat.
 
Also, greedy? I think that most people, if they are honest, want to make the most money in their jobs that they can, and most people want to save the most on purchases that they can. There's nothing wrong with that - it's only bad when the conflict of those two goals turns into hostility and unrealistic expectations from either party.
#652 of 677
Re: profit [kirstie_h] by kirstie_h HOST
Jun 12, 2009 (6:16 am)
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Replying to: kirstie_h (Jun 12, 2009 6:11 am)

I should add that the incentives to make a sale and profit were what made my last deal. Once I'd decided on the car & we'd agreed on a price, I told the salesperson that if (and ONLY if) they could get me through the entire process in an hour, they had a deal. We both got what we wanted - I'm sure she made a nice commission, and I got out of there in time to meet my deadline. I am doubtful that a manufacturer would have done the same.
 
Plus, who under this scenario gives the test drives? You'd still have to have people working in a customer service/sales capacity at manufacturer-owned shops. Someone has to provide test drives and answer questions for those who don't already know everything about every vehicle they're considering.
#653 of 677
Re: profit [thefullmonty] by isellhondas
Jun 12, 2009 (6:29 am)
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Replying to: thefullmonty (Jun 12, 2009 5:54 am)

So, do you go out in a field and dig up your own vegtables?
 
Do you take your eggs out of the nest?
 
I can't believe any dealer would let you detail your own car and pull it into the shop so that you can do your own Pre Delievery Inspection.
 
A car dealership is no different than any other business and profit isn't a dirty work.
#654 of 677
Re: profit [thefullmonty] by fonefixer
Jun 12, 2009 (6:39 am)
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Replying to: thefullmonty (Jun 12, 2009 5:54 am)

I'm assuming that when your new vehicle needs repair or breaks down you will do the repairs yourself? Basically, yes, for a lower price, many, but not all buyers would purchase the car "off the truck" so to speak. If a car never needed repair or maintenance this could work out fine. As long as cars need repair, there will always be a need for the dealer. The manufacturer isn't set up to meet the needs of the car buying public ..(from selecting/purchasing/licensing/repairs,etc.) in a retail environment w/o the dealer association. Just the perception/reputation (many times deserved) of the average car dealer over the decades has made buying a new car like going to the casino . The "house" has all the advantages, and usually wins!
#655 of 677
Re: profit [kirstie_h] by jipster
Jun 12, 2009 (7:31 am)
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Replying to: kirstie_h (Jun 12, 2009 6:16 am)

I told the salesperson that if (and ONLY if) they could get me through the entire process in an hour,
 
I would advise against buying an automobile under such time constraints. It's too easy for the dealership, or yourself, to overlook, or make a mistake, that could cost you $$$.
#656 of 677
Re: profit [thefullmonty] by boomchek
Jun 12, 2009 (9:02 am)
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Replying to: thefullmonty (Jun 12, 2009 5:54 am)

I also find it hard to believe that a dealership will let you do your own PDI and detail on a car you're buying. Either way, you still need a dealer to use their resources (shop, tools, etc) to do your own PDI.
 
And are you saying that you never sit in a vehicle or test drive it before buying it? You need a dealer for that too.
 
A car dealer is just like any other business. I assume you work in a business that tries to maximize it's profits so that they can pay you a salary.
#657 of 677
Re: profit [thefullmonty] by euphonium
Jun 12, 2009 (9:45 am)
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Replying to: thefullmonty (Jun 12, 2009 5:54 am)

So, you're the guy, down the road, who pumped his own septic tank & left a s---y, stinking mess for his neighbors.

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