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Anyone know what dealer mark up on a new car is?

Discussion in 'Motoring Forum' started by penno116, Oct 13, 2007.

  1. penno116

    penno116 Member

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    Hi all
    does anyone out there know roughly what a new car dealer will 'mark up' the car from the manufacturer. anyone at peugeot care to let me know the dealer cost price?
  2. danaldinho7

    danaldinho7 New Member

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    it depends entirely on the car, it is far easier to add £2k onto a 408 than a 107
  3. hermanmunster

    hermanmunster Member

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    Although there is margin on most models, you will find most dealers make more money on the overiders paid by the manufacturers. If a dealership hits a sales target they will get retrospective discounts on all the units sold in that period.....that's why if you can find out when their period end is you can occasionally get better deals as they try to hit the targets.
  4. FishDUDE

    FishDUDE Member

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    mark up is next to nowt. I dont pretend to understand how it works but at the moment (until tomorow night) on the 207 m:play we're discounting it by £2300ish, only if its a passport deal. but the 4007 we discount by £500.

    Its very confusing
  5. zelnik

    zelnik Guest

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    I agree with the above posts.

    Official agents make their money on after sales more than the profit out of the vehicle so do not expect much of a discount on a new unregistered vehicle. Pre-registered you would get a better deal from as they want rid of them stat!
  6. JagoUK

    JagoUK Active Member

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    look for the car you want say a LN06 metallic green ford mondeo. find out its price, then ring up the dealership saying you want to trade in a very similar car (PE06 metallic blue ford mondeo) for their brand new LN57 ford mustang

    if they tell you what they will let you trade it in for you will then know how much profit they are making on it. tbh i think they make alot on markup, but they get their comission on extended warranty/insurance/loans

    case in point, me and my bro had 2 N reg mondeo's, i enquired about a trade in on mine, flat rate 1k for my car. couple of months later his cambelt snaps, rings up, 1k for his car to trade in.
  7. Solomon Grundy

    Solomon Grundy Active Member

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    When I used to work at Alfa Romeo the margin on their cars and the Fiats next door were miniscule...we're talking £100's of pounds. They relied heavily from commision on warranty extensions and finance agreements to make their profits...
  8. FishDUDE

    FishDUDE Member

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    to give you a better idea, yesterday I sold a new 307 1.6 se sw to a gentleman, I asked the boss the discount he said £2500 off list, I then go over figures and he wants to buy, so i ask the boss again about discount he says yes, so i sign up the gent.

    get the boss to sign, he looks at the latest support sheets, and says ****! Veugeot changed their dealsnthat day. so instead of making say £500-1000 before tax etc we'll make £200, for £13,723 car its not a huge amount of profit.

    again I still dont understand margins on new cars:rolleyes:
  9. wack

    wack Active Member

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    I'm not calling you a liar but I don't believe for a minute there's only £200 profit in a new car, most of the components in the car industry are now sourced from China at ridiculously low prices, all they do is bolt the bits together, I bet that £13,723 price is about £5,000 at the factory gate.

    salesmen on 25K+ a year minimum, huge showrooms to pay for, if there were only £200-£500 profit per car they'd all be out of business
  10. furs307c

    furs307c Member

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    I got like 2000 discount of mine new.:thumbsup:
  11. dereks

    dereks Member

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    its true most of the prices you see in papers offering 2k off etc puts the profit to a couple of hundred quid at the most dealers make the money via volume bonus,finance,gap insurance etc....
  12. Solomon Grundy

    Solomon Grundy Active Member

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    You are absolutely incorrect in your assumptions.

    Plus when I was selling them 7 years ago the salary for the Fiat salesmen was £8k plus bonuses, mine was not much higher over at Alfa...I doubt all but the top salespeople would make £25k+ a year. The profit on the new car itself was minute, the commission on the warranty and finance was huge. You wanted the paint protection polish thingy (Diamondbrite I think it was called) it was a couple of hundred quid on your bill but to the Dealership it was £8.00.

    Their used cars are where they make most of the money. Much better margins plus the commission on finance.

    As a job I would say selling cars is the pits...the worst job I ever had and coming from someone who sold house insurance door to door, for a year, that's saying something, but then again you can't have fun with the recently divorced/unhappily married women down at the car dealership...naughty boy!
  13. Hi-Def

    Hi-Def Member

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    I agree the profit in the end once youve been haggled down are nothing but there making money on all the extra service they are providing

    like the £100 an hour they charge for labour when doing repairs lol
  14. deanym

    deanym Member

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    Absolute nonsense, I work for a motor car manufacturer and everything major/critical within our group is sourced from Germany, Japan or EU. French firms are also very patriotic and source most of their major components within France or locally to the manufacturing facility.

    Auto manufacturers cannot afford to source from far and wide. All the major firms source locally.

    Toyota in US sources all of its components within a 500 mile radius, some are local firms some are specially built.

    Only Porsche and Rolls Royce actually make money on the cars they build. And hold dealers accountable for any discounts. All other manufacturers and delaers make money on servicing, spares, warranties and finance.
  15. Steve.J.Davies

    Steve.J.Davies Active Member

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    One thing for sure is that the showroom price is a LOT higher than the factory gate price especially as you go up sizes in vehicles. It does not cost that much more at the factory gates to make a 'big' car compared to a 'medium' sized car. But the list price sure shoots up loads. Of course factory gate prices are closely guarded secrets by the industry.
    Where does all that money go then ?


    (you gotta love that a wing mirror costs 200-400 quid nowadays..'justified', not that it can be, on the back of the low profit margin in selling new cars possibly..). Manufacturers keeping dealers on a short lease, yes I can believe that but the overall profit on a new car sale is not small. How many thousand does it cost to drive off the forecourt in a new car - check the second hand prices...
  16. Solomon Grundy

    Solomon Grundy Active Member

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    ...and the Used cars on the forecourt.
  17. paul1967

    paul1967 Member

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    You want to check some of the major services on a chysler jeep and voyger, nearly a grand:eek:
  18. wack

    wack Active Member

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    In 2000 I went to my local ford dealer for a quote on a new ford transit, I can't remember the exact figure I was given but it was around 18k on the road after discount, I then went on the internet to find a quote and ended up at a Belgian dealers website where pries were quoted on Belgian francs (pre euro)

    I specced extras on the Belgian quote which included A/C abs and electric windows, the price I paid was £12,360, the extras would have added over £1000 to the UK dealers quote.

    The price difference roughly a Ford Focus at the Belgian dealers prices

    Don't try and tell me someones not making huge profits on new cars in the UK because I have experience they are :lesson:
  19. Crafty

    Crafty Member

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    In total I paid something like £6/7k off list for my car.

    I know someone who works in a dealer and Im told they often make more from selling the P/X on either through the trade or forecourt than they do on the new car.
  20. HardkorePrawn

    HardkorePrawn Member

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    Was that all taxes paid in the UK, or pre-import out of interest?
  21. Bluehorse

    Bluehorse Guest

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    Meanwhile in 2007............:confused:

    most of the importers who were around in 2001 are out of business, why?

    Because changes in exchange rates and more harmonised pricing killed of most of the deals.

    Anyhow on with the mark up question,

    You need to think about the profits and were they go...

    Manufacturer makes car and sells it to an importer which is usually wholly owned such as BMW GB at a big mark up.

    BMW GB sells the cars wholesale to the dealer network and has to pay for all the marketing and discounted finance plans and the warranty claims and service plans.

    Dealer sells the car to you and has a base trading margin in % terms and more on options. They earn most of their profit at quarter end if they achieve volume targets and get kickers from the importer / manufacturer. Unsurpisingly they get more % on old stuff like the bloke who sold the 307 Peugeot, why would anyone buy one when they're now pushing the 308 anyhow.

    I think at best Ford dealers can earn 12% on a new car if they hit all their targets and achieve top scores on customer satisfaction and dealer premises mystery shops. Only 6% is guaranteed if I'm right so if your dealer is miles away from hitting their targets they won't gamble and give you a big discount. Pick one who is near the end of a quarter and you will get the big discounts.

    Take a look at Pendragon plc and see how much they're making, scary!! Same with Inchcape plc
  22. wack

    wack Active Member

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    no taxes to pay as it's in the EU, I didn't even have to pay the VAT as i'm vat registered, I just had to account for it on the quarterly return

    I agree the price difference has been eroded by exchange rates but transits are still the same price in the UK as they were in 2000 they've just gone up in belgium to stop people in the UK importing them, if they were 12k in 2000 the production cost hasn't gone up 50% in 7 years

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