I think there’s a another part of the new car sales that no one probably knows about. Ex. Toyota need someone to sell their cars. Toyota will pay the owner of the dealer a certain % of the vehicle. Say, Toyota gives the dealer a car with $30,000 and if the dealer sales it at 30k they will get 10% of that sale. What dealers then do is put a mark up of a MSRP of $38,000. The dealer secures the 3k from the sell already but also has mark up of 8k . The lowest the dealer is willing to sell that car for is $33,000. The dealer already secured 3k commission plus 3k mark up. He is in profit 6k . Leaves the dealer with about 5k to pay all employees and expenses. With that 5k he may secure 2k to pay the managers and leaving 3k for the salesman to make % of that 3k . If the dealer gets rid of all the mark up which is 3k they then pay the salesman a flat fee for moving the unit. I believe this is how is done . Dealers never lose and neither will the manufacturer. And remember the car is not paid to the manufacturer until it’s sold. In other words, dealers are the salesman of Toyota for ex. And dealers have other salesman to move those vehicles. And not saying there’s that much mark up either but for sure a manufacturer will pay a % of the whole car to the dealer for selling their vehicles . It’s a big pyramid of salesman’s
Not only do Stealerships recommend unnecessary repairs but do they actually do the service you pay them to do? For example, if you pay for synthetic oil how do you know if they actually put in synthetic oil instead of regular oil? There is no way to look at the oil and see if it is actually what you paid for.
I traded my 2013 Honda Civic LX Standard transmission in for $4500 and found it for sale for $7900 (verified by VIN). I though I'd post this here as I recall in your video you mentioned that it's not always clear how much dealers make on used cars. I found the VIN because when clicking the "buy Carfax" link on the Autotrader listing, the link contains the VIN! :)
Very nicely explained thank you. I didn't hear anything on dealers making money on financing. In other videos on the subject, I hear that dealers get kick backs on a percentage of the interest charged from auto loans by financial institutions. I know it might be difficult if not impossible to determine what that percentage is but If in fact that is a common practice that could be another video on that subject that could be valuable to us.
Giving y'all heads up My friend owns a dealership and he makes about 40% and up most of the time on what he spends for each car. profit from all used cars... He spend about 3k -15k at the Max and make a minimum of 4k plus on each sale. Since he has a dealership license for auction he gets to start up the car and guess the problem before betting it so y'all better bring your mechanic with y'all 💪🏼💪🏼💪🏼
Notice he said that the dealers are only making $700 to $2,000 when buying at MSRP. What he failed to mention is that the MSRP has some profit already built in. So for example, if the MSRP is $47,000, that could potentially mean that $4,000 of profit is built into that MSRP. The invoice, for example, could be $43,000, therefore making the profit $4,000. I'm not buying the statement that dealers aren't making that much on the sale of a new vehicle. Especially since the pandemic and the fact that several dealers had market adjusted prices. The cost of vehicles in the United States has NEVER been transparent.
A year late in answering this but look at your state laws. Many states will fine dealers if they advertise a car at a particular price then try to tack on a fee that was already installed when they offered the car to you. When you bring it up that they can be fined and you get up to leave, they will magically get rid of that fee and reduce the price a few hundred because they don't want to be fined thousands.
Here is an idea for a video on 4runners the TRD cold air intake & trd air filter that doesn't come on a trd pro. & the only thing that makes the trd pro exhaust give it that racing performance they sell u. as a SR5 and TRD pro have the same engine HP when u add a TRD cold air intake to a sr5 it gives it 5-20 more horse power BUT when a TRD cold air intake is added to a TRD Pro with the TRD pro exhaust on it gives it 15 to 40 more horse power... & don't forget the torque and gas mileage it will add giving a trd Pro over 300 hp when working in top condition that's more than a 1984 454 chevy on a 3x4 ton truck had as it only had around 250 HP... I say dyno test for results on both before and after to see 🎌 if the pro can't get more air flow intake than the sr5 then the bigger exhaust on the TRD can't release more exhaust 🎌
Head left then head right then head left then head right then head left then head right then head left then head right then head left then head right then head left then head right then head left then head right then head left then head right then head left then head right then head left…. Dear lord, hold your head still dude.
I think there’s a another part of the new car sales that no one probably knows about. Ex.
Toyota need someone to sell their cars. Toyota will pay the owner of the dealer a certain % of the vehicle. Say, Toyota gives the dealer a car with $30,000 and if the dealer sales it at 30k they will get 10% of that sale. What dealers then do is put a mark up of a MSRP of $38,000. The dealer secures the 3k from the sell already but also has mark up of 8k .
The lowest the dealer is willing to sell that car for is $33,000. The dealer already secured 3k commission plus 3k mark up. He is in profit 6k .
Leaves the dealer with about 5k to pay all employees and expenses. With that 5k he may secure 2k to pay the managers and leaving 3k for the salesman to make % of that 3k . If the dealer gets rid of all the mark up which is 3k they then pay the salesman a flat fee for moving the unit.
I believe this is how is done . Dealers never lose and neither will the manufacturer. And remember the car is not paid to the manufacturer until it’s sold.
In other words, dealers are the salesman of Toyota for ex. And dealers have other salesman to move those vehicles. And not saying there’s that much mark up either but for sure a manufacturer will pay a % of the whole car to the dealer for selling their vehicles . It’s a big pyramid of salesman’s
Not only do Stealerships recommend unnecessary repairs but do they actually do the service you pay them to do? For example, if you pay for synthetic oil how do you know if they actually put in synthetic oil instead of regular oil? There is no way to look at the oil and see if it is actually what you paid for.
I traded my 2013 Honda Civic LX Standard transmission in for $4500 and found it for sale for $7900 (verified by VIN). I though I'd post this here as I recall in your video you mentioned that it's not always clear how much dealers make on used cars.
I found the VIN because when clicking the "buy Carfax" link on the Autotrader listing, the link contains the VIN! :)
That sounds about right. Even of the dealer has to spend a bit of money on reconditioning, they will still make a decent profit at that price.
Best hidden gem in this field
Love it got right to the point and currently experiencing the extra add on!!
Very nicely explained thank you. I didn't hear anything on dealers making money on financing. In other videos on the subject, I hear that dealers get kick backs on a percentage of the interest charged from auto loans by financial institutions. I know it might be difficult if not impossible to determine what that percentage is but If in fact that is a common practice that could be another video on that subject that could be valuable to us.
Giving y'all heads up My friend owns a dealership and he makes about 40% and up most of the time on what he spends for each car. profit from all used cars... He spend about 3k -15k at the Max and make a minimum of 4k plus on each sale. Since he has a dealership license for auction he gets to start up the car and guess the problem before betting it so y'all better bring your mechanic with y'all 💪🏼💪🏼💪🏼
Notice he said that the dealers are only making $700 to $2,000 when buying at MSRP. What he failed to mention is that the MSRP has some profit already built in. So for example, if the MSRP is $47,000, that could potentially mean that $4,000 of profit is built into that MSRP. The invoice, for example, could be $43,000, therefore making the profit $4,000. I'm not buying the statement that dealers aren't making that much on the sale of a new vehicle. Especially since the pandemic and the fact that several dealers had market adjusted prices. The cost of vehicles in the United States has NEVER been transparent.
Well said!
Great video
How to get a good deal on a lease would be a good topic
Thanks for the advice Shari. Can you make a video comparing buying a used car from dealership vs a private seller?
Great suggestion. Will do!
i know for a fact around here used car sales making 6-8 thousand
Any suggestions on what to do when the car already has the expensive dealer-installed option installed and they can't or won't remove it?
A year late in answering this but look at your state laws. Many states will fine dealers if they advertise a car at a particular price then try to tack on a fee that was already installed when they offered the car to you. When you bring it up that they can be fined and you get up to leave, they will magically get rid of that fee and reduce the price a few hundred because they don't want to be fined thousands.
Here is an idea for a video on 4runners
the TRD cold air intake & trd air filter that doesn't come on a trd pro. & the only thing that makes the trd pro exhaust give it that racing performance they sell u.
as a SR5 and TRD pro have the same engine HP
when u add a TRD cold air intake to a sr5 it gives it 5-20 more horse power
BUT when a TRD cold air intake is added to a TRD Pro with the TRD pro exhaust on it gives it 15 to 40 more horse power... & don't forget the torque and gas mileage it will add
giving a trd Pro over 300 hp when working in top condition that's more than a 1984 454 chevy on a 3x4 ton truck had as it only had around 250 HP...
I say dyno test for results on both before and after to see 🎌 if the pro can't get more air flow intake than the sr5 then the bigger exhaust on the TRD can't release more exhaust 🎌
this will soon change . the market is changing at a alarming rate . just give it a few more years .
Head left then head right then head left then head right then head left then head right then head left then head right then head left then head right then head left then head right then head left then head right then head left then head right then head left then head right then head left…. Dear lord, hold your head still dude.
They make at least 15 to 18% off selling a new car
He is giving false information