What is the average margin on a vehicle from a used car dealer?

Question

I'm going to be looking for a used car here from a dealer, and I'd like to be as informed as possible when entering negotiations. A dealer has the car I want, used (looks like it was brought back from a lease), and I'm wondering how to estimate what they have invested in it. Is there a guideline for this, or any insight that can be offered?

score 7 · Accepted Answer · answered Jan 08 '11 at 02:16

There's no rule of thumb -- people get ripped all of the time on trade-ins or when they sell cars to the dealer.

I think with used car negotiations, demand for the car is more important than their cost. If you're talking a 2007 Kia, there will be lots of room. If it's a 2009 Honda, they won't even discuss price.

In terms of negotiations, you'll only get the best price if you're willing to walk away at most dealers. I usually pick 2-3 candidate cars at different lots and show up on the last day of the month. If it's busy, look at the wall and find the #1 salesman and be a pain in the butt. Refuse to listen to the 4-square speil and walk away slowly if he doesn't negotiate. When I was in high school, my dad almost ran over a car salesman who literally jumped out in front of the car as we were leaving. My dad got his price and signed the contract right in the car.

score 6 · Answer 2 · edited Sep 30 '15 at 03:20

The low end lots generally buy at auction and add $1000 to their cost. Volume is their key. Except for bait cars, the really nice one to get you into the dealership, the longer a car sits the better your options to deal. Trouble is, if the car sits for weeks it probably has something wrong with it. My advice, as a former lower-end dealer, is set your price and buy the best you can afford. If a dealer is a few hundred dollars over, just let him know. If they want to move the car they will meet your price. If not, walk away.

score 1 · Answer 3 · edited Apr 13 '17 at 12:25

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It's mostly talking about new car purchases, but I think many of the points addressed in this extremely good previous answer may help. The true gem is an article linked in one of the comments.

edited Apr 13 '17 at 12:25

Community

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answered Oct 16 '11 at 17:26

Sean W.

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score 1 · Answer 4 · edited Jan 08 '13 at 20:11

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Of course, there is no fixed margin – it all will depend upon the condition of car, the model, make, year and all.

edited Jan 08 '13 at 20:11

Chris W. Rea

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answered Jan 08 '13 at 20:08

Autorev

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What is the average margin on a vehicle from a used car dealer?

4 Answers4