Markup On Used Car Lot

[coopns]

If you had to guess, about how much are cars/trucks marked up on a used car lot?

Say a car was $10K, would they be making about 2K?

I understand it could vary widely per vehicle and dealer but just a general...are they making $1K or 2K on an
average used car lot?

 

[Alfred_B]

Look at the trade-in value and the dealer price on Edmunds and it should give you a pretty good idea on the markup. To see how much they are actually making, you will have to take their expenses into account (salaries, benefits, rent, utilities, supplies and purchased services if they outsource the paint/repairs/detailing).

 

[Nick1994]

Dealers are slimy.

I went last month to look at a 2011 Hyundai Sonata, advertised for $7,599. Got there and the car wasn't ready to be sold, they hadn't inspected it or even washed it. I test drove it and went to see the OTD price, they wanted almost $13k. They added on doc fees, paint sealant, and $2,500 in "reconditioning fees". They hadn't even looked at the car. I asked what those fees were, and they said that they use that price to factor in what it costs to get the car up to par to sell, if it needs a couple tires, hoses etc. I told them it was a ripoff.

Also while I was there they priced out a 2013 Hyundai Sonata, asking price $11,999. OTD was $19k. There was $4,500 in reconditioning fees on that one. On a car with 23k miles.

He also said their "internet price" is what they paid for the car. I told the guy that they must be the only dealership in town that pays $2,000 over KBB trade-in value.

Oh, and this was a real Hyundai/Kia dealer.

 

[javacontour]

Depends on too many variables.

A buy here pay here probably has the highest markups because they are selling financing, not the car.

Want to know what they have in the car? It's probably the down payment. Everything they get above that is their profit in many cases.

Buy cheap at an auction, do minimal reconditioning and advertise the car with $2000 down, buy here-pay here....

 

[Andrew1972]

You have no idea and this why dealers love selling you used over new. Far more opportunity for profit selling used.

From a sheer guess is 50% down to 5%. My only car traded I got $3k and they put up for sale at $6k and gone quickly.

 

[Lyman]

Many years ago I found a 1978 Jeep Cherokee on a lot. It was due to be gone though and cleaned up. When I asked how much it was I was told $5,000. I told them not to even touch it and offered $2,500. They stalled around quite a bit but I got it for what I offered.

 

[JTK]

Having been involved with the process of buying used vehicles from big dealerships many times, the longer the used vehicle sits on the lot, the lower the markup. I recently helped a family member purchase a used 2012 Toyota Avalon from a huge local multi-brand dealership. We bought it from the Toyota dealership, but it sat on the Subaru lot down the road for ~3 months. We ultimately paid what the dealership paid the previous owner for trade-in allowance. Obviously they still made money on the deal as you would expect.

 

[4wheeldog]

I was helping a woman friend shop for a used car. She was interested in getting AWD, so we went by the Subaru used lot. I had been shopping there for a new Outback not long before.

That had a 4 year old Outback for sale that we looked at. Then, I asked the salesguy why this one was only $1000 less the new ones inside. His answer floored me......People who are shopping for used cars cannot afford new ones.

Neither of us bought a car from that dealer.

 

[69GTX]

Varies wildly by the used car dealer operation (clunkers or cream puffs) as well as the year/make/model of the car itself. The one car that they sell at break even gets covered by one they make 50-100%. Typically I'd expect most work on 20-35% markup. Doesn't mean you can't find one at 0-10% mark up after its sat for a few months.

The last car I bought at a used car lot charged me $9K for a 22K mile 2002 Lincoln. They got that from a new car dealer trade-in. There's no way the new car dealer would have let it go for less than $7K-$8K. The 115K mile Z28 I traded in they gave me $3K for. It was on the lot for $3,800...a 26% markup. Who knows what they got for it. Had I known about the LS1Tech website at that time I probably could have gotten $3,800-$4,000 privately for that very clean '98 Z28 A4. Lesson learned to remember to visit the specialty car model websites before determining a sales price.

What was laughable was that CarMax had similar 2000-2004 Caddies and Lincolns for sale but at the $10K-$14K range...none of them under 65K miles and some as high as 125K miles.

 

[HerrStig]

Originally Posted By: Nick1994
Dealers are slimy.

I went last month to look at a 2011 Hyundai Sonata, advertised for $7,599. Got there and the car wasn't ready to be sold, they hadn't inspected it or even washed it. I test drove it and went to see the OTD price, they wanted almost $13k. They added on doc fees, paint sealant, and $2,500 in "reconditioning fees". They hadn't even looked at the car. I asked what those fees were, and they said that they use that price to factor in what it costs to get the car up to par to sell, if it needs a couple tires, hoses etc. I told them it was a ripoff.

Also while I was there they priced out a 2013 Hyundai Sonata, asking price $11,999. OTD was $19k. There was $4,500 in reconditioning fees on that one. On a car with 23k miles.

He also said their "internet price" is what they paid for the car. I told the guy that they must be the only dealership in town that pays $2,000 over KBB trade-in value.

Oh, and this was a real Hyundai/Kia dealer.
Where was the ad for 8 grand? In this state the Attorney General calls it bait and switch. I personally brought to the AG's attention a Honda dealer which had prices posted in large, easy to see numbers on the windscreen a price, and then in fine print you had to walk up to "with your $ 3500 trade". That practice soon stopped.

 

[maximus]

Originally Posted By: Nick1994


Also while I was there they priced out a 2013 Hyundai Sonata, asking price $11,999. OTD was $19k. There was $4,500 in reconditioning fees on that one. On a car with 23k miles.


That's criminal. Sonatas of that generation are dime a dozen. Hyundai built almost a million off them, literally. That $19k better be for a 2.0T Limited with every option. I paid just over 20k for my GLS bran new.


Some people assume they can't afford new or think they'll always come out ahead buying used. Dealers are unscrupulous and take full advantage of the ignorant.

 

[Nick1994]

Originally Posted By: maximus
Originally Posted By: Nick1994


Also while I was there they priced out a 2013 Hyundai Sonata, asking price $11,999. OTD was $19k. There was $4,500 in reconditioning fees on that one. On a car with 23k miles.


That's criminal. Sonatas of that generation are dime a dozen. Hyundai built almost a million off them, literally. That $19k better be for a 2.0T Limited with every option. I paid just over 20k for my GLS bran new.


Some people assume they can't afford new or think they'll always come out ahead buying used. Dealers are unscrupulous and take full advantage of the ignorant.
It was a base model GLS lol.

 

[Nick1994]

Originally Posted By: HerrStig
Originally Posted By: Nick1994
Dealers are slimy.

I went last month to look at a 2011 Hyundai Sonata, advertised for $7,599. Got there and the car wasn't ready to be sold, they hadn't inspected it or even washed it. I test drove it and went to see the OTD price, they wanted almost $13k. They added on doc fees, paint sealant, and $2,500 in "reconditioning fees". They hadn't even looked at the car. I asked what those fees were, and they said that they use that price to factor in what it costs to get the car up to par to sell, if it needs a couple tires, hoses etc. I told them it was a ripoff.

Also while I was there they priced out a 2013 Hyundai Sonata, asking price $11,999. OTD was $19k. There was $4,500 in reconditioning fees on that one. On a car with 23k miles.

He also said their "internet price" is what they paid for the car. I told the guy that they must be the only dealership in town that pays $2,000 over KBB trade-in value.

Oh, and this was a real Hyundai/Kia dealer.
Where was the ad for 8 grand? In this state the Attorney General calls it bait and switch. I personally brought to the AG's attention a Honda dealer which had prices posted in large, easy to see numbers on the windscreen a price, and then in fine print you had to walk up to "with your $ 3500 trade". That practice soon stopped.
Was on their own website and on Autotrader.

 

[Garak]

Originally Posted By: Nick1994
He also said their "internet price" is what they paid for the car.

In this province, that is supposed to be tightened up shortly. Basically, they will be required to honour their internet or ad price. Taxes, of course, are separate, and if one chooses add ons, that's one's own choice. But, all this extra rubbish will not be allowed.

 

[IndyIan]

Originally Posted By: Nick1994
Dealers are slimy.

I went last month to look at a 2011 Hyundai Sonata, advertised for $7,599. Got there and the car wasn't ready to be sold, they hadn't inspected it or even washed it. I test drove it and went to see the OTD price, they wanted almost $13k. They added on doc fees, paint sealant, and $2,500 in "reconditioning fees". They hadn't even looked at the car. I asked what those fees were, and they said that they use that price to factor in what it costs to get the car up to par to sell, if it needs a couple tires, hoses etc. I told them it was a ripoff.

Also while I was there they priced out a 2013 Hyundai Sonata, asking price $11,999. OTD was $19k. There was $4,500 in reconditioning fees on that one. On a car with 23k miles.

He also said their "internet price" is what they paid for the car. I told the guy that they must be the only dealership in town that pays $2,000 over KBB trade-in value.

Oh, and this was a real Hyundai/Kia dealer.

Have a read on what the advertising laws are in your state, if you think they are pushing it, go talk to a lawyer, maybe get them to write a letter to the dealer that they are purchasing the car for you at the advertised price. For a couple hundred in fees you might get the car for what its advertised for.

 

[KitaCam]

The Toyo dealer had 3 prices on my Camry.
...the highest was on Ebay, the lowest (by $1800) on Cars.com...the window was midway between them.
I offered 20% less than the lowest, settled on 15% under.

You have to do your research....

 

[Wolf359]

Originally Posted By: maximus
Originally Posted By: Nick1994


Also while I was there they priced out a 2013 Hyundai Sonata, asking price $11,999. OTD was $19k. There was $4,500 in reconditioning fees on that one. On a car with 23k miles.


That's criminal. Sonatas of that generation are dime a dozen. Hyundai built almost a million off them, literally. That $19k better be for a 2.0T Limited with every option. I paid just over 20k for my GLS bran new.


Some people assume they can't afford new or think they'll always come out ahead buying used. Dealers are unscrupulous and take full advantage of the ignorant.


I'm seeing 2010 Mercedes E350's going for around $19k-23k, these typically have around 40-60k on them. They also don't have many major problems like earlier generations.

 

[supton]

Originally Posted By: KitaCam
The Toyo dealer had 3 prices on my Camry.
...the highest was on Ebay, the lowest (by $1800) on Cars.com...the window was midway between them.
I offered 20% less than the lowest, settled on 15% under.

You have to do your research....


Nice. Does pay to look around. I have seen lower prices on CL than on dealer sites (BHPH or dealers a step above that).

 

[KitaCam]

Well, I was commenting on the fact that ONE dealer had 3 prices on the SAME car....