What is the average markup of a used car sold by dealer/lot?

[Tminus2mins]

RobM77 said:

nosongnodance said:

pilchardthecat said:

RobM77 said:

I've had two experiences with BMW dealers which have caused me to get a trade in quote within a month or two of buying a car (both were mis-sold to me and I had my money back refused). The first was bought for £15850 and I was offered £8500 trade in (I got £10k in the end from somewhere else), and the second £22,500 and I was offered £17k trade in (I've still got the car, and will probably sell privately soon).

Is that the Z4M..... ?

BMW are bds for stty trade-in prices though. I've bought 3 cars from BMW main dealers and have felt a suspicious rawness around the rectal area on all 3 occasions, which usually only surfaces a few months later

What happened a few months later, if you don't mind me asking?

The higher priced car was my current car, a non M Z4 Coupé 3.0si. It was £22,500 in November because it has only done 11k miles and still smelt new. Lovely car.

The problem was concerning a roof rack. I rung up my local BMW dealer telling them I'd just sold my 328i Sport Coupé and wanted a car with a roof rack for my kayak, but one that was still good to drive like the 328i was. I expected them to suggest a 335i, M3 or 135i (I was in fact looking at a 135i at another dealer that weekend), but they said they had a lovely Z4C in and they'd check about the roof rack. I told the salesman I wasn't interested unless it had one, and we ended the call. The salesman phoned back half an hour later to tell me that he'd checked with parts and it did have one, so I popped over for a test drive. The following day I test drove the 135, and the Z4C was my clear favourite of the two, so I popped over and bought it. This was in November. I start kayaking again in March (I hate the cold and am a wuss), so in mid February I rung up parts to order the roof rack, and was told no such thing existed. I called the salesman straight away, and at first he apologised. When I said that I wanted my money back, he got really defensive and said, I quote: "you can't expect me to know such details about all our BMW models", to which I simply said "yes I can, that's your job, you're a BMW salesman". I pursued it with his manager and BMW UK but got nowhere.

I'm currently looking at making myself feel a bit better by buying my Dad's '07 320d off him in a few months time at close to trade in price, and selling the Z4C privately. I nearly sold the Z4C last month actually, but I had a big Euro trip coming up and chickened out hours before a serious buyer was travelling up to see it... I really like the car, but needs must - it doesn't do what it's supposed to and as such doesn't get much use. My neighbours even take the piss out of me for waxing it more than I drive it

Sorry for the long story, but it really wound me up, especially as I lost my job soon after buying it and needed the money!

Slightly OT, and with respect, i'm not surprised they didn't give you your money back! If the purchase of your new car hinged on a roof rack solely i would have wanted to see it on the car before you bought it, or at least proof that it existed by the way of a photo in the brochure. I wouldn't have taken even the most senior of salesmans word for it if such a big factor depended on it.

[RobM77]

Tminus2mins said:

RobM77 said:

nosongnodance said:

pilchardthecat said:

RobM77 said:

I've had two experiences with BMW dealers which have caused me to get a trade in quote within a month or two of buying a car (both were mis-sold to me and I had my money back refused). The first was bought for £15850 and I was offered £8500 trade in (I got £10k in the end from somewhere else), and the second £22,500 and I was offered £17k trade in (I've still got the car, and will probably sell privately soon).

Is that the Z4M..... ?

BMW are bds for stty trade-in prices though. I've bought 3 cars from BMW main dealers and have felt a suspicious rawness around the rectal area on all 3 occasions, which usually only surfaces a few months later

What happened a few months later, if you don't mind me asking?

The higher priced car was my current car, a non M Z4 Coupé 3.0si. It was £22,500 in November because it has only done 11k miles and still smelt new. Lovely car.

The problem was concerning a roof rack. I rung up my local BMW dealer telling them I'd just sold my 328i Sport Coupé and wanted a car with a roof rack for my kayak, but one that was still good to drive like the 328i was. I expected them to suggest a 335i, M3 or 135i (I was in fact looking at a 135i at another dealer that weekend), but they said they had a lovely Z4C in and they'd check about the roof rack. I told the salesman I wasn't interested unless it had one, and we ended the call. The salesman phoned back half an hour later to tell me that he'd checked with parts and it did have one, so I popped over for a test drive. The following day I test drove the 135, and the Z4C was my clear favourite of the two, so I popped over and bought it. This was in November. I start kayaking again in March (I hate the cold and am a wuss), so in mid February I rung up parts to order the roof rack, and was told no such thing existed. I called the salesman straight away, and at first he apologised. When I said that I wanted my money back, he got really defensive and said, I quote: "you can't expect me to know such details about all our BMW models", to which I simply said "yes I can, that's your job, you're a BMW salesman". I pursued it with his manager and BMW UK but got nowhere.

I'm currently looking at making myself feel a bit better by buying my Dad's '07 320d off him in a few months time at close to trade in price, and selling the Z4C privately. I nearly sold the Z4C last month actually, but I had a big Euro trip coming up and chickened out hours before a serious buyer was travelling up to see it... I really like the car, but needs must - it doesn't do what it's supposed to and as such doesn't get much use. My neighbours even take the piss out of me for waxing it more than I drive it

Sorry for the long story, but it really wound me up, especially as I lost my job soon after buying it and needed the money!

Slightly OT, and with respect, i'm not surprised they didn't give you your money back! If the purchase of your new car hinged on a roof rack solely i would have wanted to see it on the car before you bought it, or at least proof that it existed by the way of a photo in the brochure. I wouldn't have taken even the most senior of salesmans word for it if such a big factor depended on it.

True. I'm obviously more trusting than you I shall be more careful and possibly cynical in the future.

I wasn't really after all of my money back. What I asked for was a decent trade in against a more suitable car. £17k on a £22,500 car that had barely done 1,000 miles wasn't really what I was expecting. He was just giving me the Glass's Guide value as if I'd walked in and said "hi there, I'm bored and fancy a change".

Surely a dealer should offer some comeback? If not, I don't see the point in buying from one.

[Kentish]

Depends on the car and the resale value but a general rule of thumb is that if your car is worth less than £10k at a dealers they will offer you 50% of its value.

As the value goes up the percentage usually comes down a little so that they make a bit less of a margin.

IME.

[J4CKO]

I remember seeing things at the place I worked at, ex fleet XR2's bought en masse on Wednesday at Auction, as many as he could lay his hands on (at least 5) and they all went within a week at about 800 quid each pure profit.

Metro that came in, guy just wanted rid, dealer was cheeky and bid £150, he took it, he got his wallet out and paid him cash, the bloke handed over the docs and dissapeared, another bloke wanders in with his daughter looking for a first car, I was in the process of valeting it, he paid £750, six hundred quid profit for nothing other than being there, being cheeky and having me on a tenner a day valeting it.

Conversely, a BMW 635 he bought hung round for months, maybe a year, lost a fortune and eventually sold to a trio of Rasta's because they offered cash and were will to make it go away, pity really as I liked having to give it a run round the block.

Made a lot of money he did but Gambled and drank it all away, drove his family away, ended up having to sell and then ended up still there but washing cars for a living and living in a grotty bedsit.





So, mark up, whatever you can get away with for the minimum ammount of effort and interaction with the public, its just a commodity, this bloke was not at all interested in cars, I asked him what his favourite car was, he said, "One with Petrol in Lad", and it was true, he took whatever came in with any juice in and used it until it was empty !

Edited by J4CKO on Thursday 29th July 12:51

[Stedman]

nosongnodance said:

Ironically I found Park Lane MINI to offer the best deals!

Ex-girlfriends dad found Park Lane offer the best deals when he was looking for a 530D

[Deva Link]

V88Dicky said:

It just so happens I got a straight £5000 for my old car when I traded it in, and iirc it was sold on for £6495. About 35% mark up then

I realise that you're just responding to the OP, but business doesn't work on "mark up".

It's gross profit margin (GPM), which using your figures, is 23%. (sell minus buy, divided by sell, x 100).

For any business, a gross margin of 23% is pretty poor.

[pilchardthecat]

Deva Link said:

V88Dicky said:

It just so happens I got a straight £5000 for my old car when I traded it in, and iirc it was sold on for £6495. About 35% mark up then

I realise that you're just responding to the OP, but business doesn't work on "mark up".

It's gross profit margin (GPM), which using your figures, is 23%. (sell minus buy, divided by sell, x 100).

For any business, a gross margin of 23% is pretty poor.

Not if there isn't any value being added.

23% GM is pretty fking good if all you're doing is flipping an asset from one mug to another

[AUDIHenry]

Thanks lads. You mention "valeting" - what is this? In the U.S., it's when you pay someone to park your car for you. What do you mean when you say it?

[pilchardthecat]

AUDIHenry said:

Thanks lads. You mention "valeting" - what is this? In the U.S., it's when you pay someone to park your car for you. What do you mean when you say it?

It's a fancy word for "rinsing it with water, cleaning it rather carelessly with a sponge, stealing the loose change and kerbing the alloys"

[Mastodon2]

AUDIHenry said:

Thanks lads. You mention "valeting" - what is this? In the U.S., it's when you pay someone to park your car for you. What do you mean when you say it?

I think in the U.S you guys call it "detailing".

[AUDIHenry]

Mastodon2 said:

AUDIHenry said:

Thanks lads. You mention "valeting" - what is this? In the U.S., it's when you pay someone to park your car for you. What do you mean when you say it?

I think in the U.S you guys call it "detailing".

Yes, that's the one. Thanks!

[eliot]

I traded my car £3000 for £3000. Dealer had it up for £6995 - to be fair it sat there for months and months and I got bored of checking if it had sold. I recon it was probably worth about £4500 on a forecourt.

[confused_buyer]

pilchardthecat said:

Not if there isn't any value being added.

23% GM is pretty fking good if all you're doing is flipping an asset from one mug to another

It's not great. It may look like £1495 profit but once the VAT is paid that is £1280. Deduct a valet, MOT and a few other bits and you're probably down to £1000 in which you have to account for warranty and legal obligations. Then factor in the cost of the bit of land it is sitting on whilst waiting to be sold, the fact that most cash buyers would want a discount anyway, insuring it etc.

Most cars with a £1500 purchase vs retail price end up making about £500-£700 when all is said and done.

[Fane]

confused_buyer said:

pilchardthecat said:

Not if there isn't any value being added.

23% GM is pretty fking good if all you're doing is flipping an asset from one mug to another

It's not great. It may look like £1495 profit but once the VAT is paid that is £1280. Deduct a valet, MOT and a few other bits and you're probably down to £1000 in which you have to account for warranty and legal obligations. Then factor in the cost of the bit of land it is sitting on whilst waiting to be sold, the fact that most cash buyers would want a discount anyway, insuring it etc.

Most cars with a £1500 purchase vs retail price end up making about £500-£700 when all is said and done.

This is sensible. For a car under 10k, I'd look to make c. £1.5k gross margin. Up to 20k, £2.0k gross margin, and up to £25k, £2.5k gross margin. Although the return in percentage terms is less, the effect on my bank balance is greater. Punters law states that that the greater the price of the car, the more warranty problems you have though.