[martin mustang]

I always wondered what dealer make when buying new, i.e. the margin they aim for? I know they do make a healthy amount from the trade in around, I guess around 5k give and take, and if not wrong I believe they make more cash out of traded cars, hence would love to know what they cash in out of new cars sold, maybe someone in the forum use to work in the field.

[m@rk]

It's not about making a margin on an individual vehicle.

A lot of the money a dealer makes is in the form of bonuses set out by the manufacturer. So they may get a bonus for registering a set number of vehicles in a month or quarter. They also get bonuses for getting high scores in the customer satisfaction feedback and so on.

In some cases, for a large dealership, these bonuses could be well into 7 figures for a year.

This is one of the reasons why you see dealers with loads of pre registered cars all with no miles on the clock yet at well below the price new. By registering the cars themselves, they can claim the bonus which is worth much much more than the margin on a car.

Strictly speaking they are selling those pre registered cars as a significant loss but the registration bonus more than makes up for that.

As for trade in. More often than not, the car being traded will just be shipped off to auction with little or no money made on it unless it is something quite new that would sit well on their own forecourt.

There are also all the bonuses for "extras"

They can get a sizeable "commission" for selling finance. Thus you get a better deal on a finance car than just paying cash

Plus there is all the stuff like GAP insurance, SupaGuard, Extended Warranties, Floor Mats etc etc

You get the idea

[Balster]

From my research into my next car (new Audi S8). I have been reliably informed by a family member in an Audi dealership in the Midlands, that the mark-up on the S8 is nearly £30k!!! Armed with that, I should be able to negotiate a hefty discount. The mark-up will be different on all cars, but m@rk is spot on, the manufacturer bungs are worth more than the mark-ups. All dealers buy the cars at the same price from the manufacturer.

[Johnny Grabble]

Agree with the above. Not so long ago however a mate of mine in the trade reckoned individual vehicle margins were between 8 & 18% depending on how well the customer negotiated. So that's in addition to the incentives.
The other thing you'll notice at BMW dealers is that no matter how well specced your trade in is, you'll always be bid bottom book.
I recently traded in one which ended up on their forecourt as an AUC. The sticker price of that car was 20% more than I got for it. Not complaining though as I got over 20%of list on the new one... And I still find a trade in far more convenient and less risky than selling privately.

[martin mustang]

Thanks folks very useful feedbacks and insight, interesting set up for new cars me thinking it was always down to individual car being ordered!

[m@rk]

Originally Posted by martin mustang

Thanks folks very useful feedbacks and insight, interesting set up for new cars me thinking it was always down to individual car being ordered!

There are loads of variables.

One thing worth noting if you are looking for a deal from a dealer is "when" you order.

If you walk into the showroom 2 days before the end of a sales quarter and are prepared to accept a car in group stock that can be delivered before month end then the sales person will fall over himself to do a deal

If you walk in during new reg month when the sales person has already hit his target and order a car that has to be factory built with a 6 month lead time, that doesn't help the salesman hit his target now so is not as appetising to him.

Of course the challenge is finding the car you want, in the spec you want and the colour you want (the whole reason you are buying new in the first place) but if you are open to suggestions, your salesman will go above and beyond and of course you get your car a lot sooner