Whats a fair dealer profit margin ??

i think the question is just a difficult one to pose (because of the many other variables), and therefore difficult to answer.

if you say you're paying cash, you will likely be quoted a different price than if you say you're using toyota credit. or if have a trade in, and the price for that trade in. if you're making a downpayment, etc.

so while there is an absolute question of how much is fair to pay relative to MSRP, that is not the total revenue and profit on that particular sale.

 

nope, not even close

 

^ This

$28K for a 2WD TRD OR DC V6 is very realistic. I believe 4WD cost about an extra $3k in my region. So many people make assumptions without even knowing all of the facts.

I wonder if the OP salesman even knew the type of truck he was talking about could come in 2WD? I seemed to know a lot more about the truck and it's options than any salesman I talked to at several dealerships. For example the salesman at 3 out of 4 dealerships told me the all weather flooring option I wanted doesn't exist for Tacomas. One guy even claimed to be selling them for 13 years and said I should trust him, he knows. lol

 

Hi,
Obviously if there were five people involved in the sale of one vehicle as in aworthyopponents case it must be a pretty good cow to milk.

I shy away from the dealerships with grandiose buildings, too much overhead, too fat and most likely to use deceitful sales tactics and pressure you to buy the high profit low to no value add ons like extended warranties, undercoating, striping packages, fabric protection.... If buying a vehicle was more straight forward, less games to see how much we can take this sucker for their would be a lot better attitude on the part of buyers about the "stealerships", maybe a few more vehicles sold .


As far as profit margins go no dealership is going to sell a vehicle at a loss and they are big boys and girls who can and do take care of themselves. I have bought two vehicles in the last five years, I used Edmunds.com to establish a price I was willing to pay based on what others were paying and went shopping via the Internet followed up with phone conversations. Some dealerships said I was close, others politely or not so politely told me "I wasn't even in the ball park" their ball park being as much as 25% above my target price. The ones that got my business must have made a fair profit from their standpoint.

Jim

 

Some people have the time to shop it some don't. Get in a hurry you'll will generally pay more. I shopped and neg. for 7 months and had to go out of my state till I finally got my price.

There are many factors into deciding if a dealer will take a deal or not.
But be rest assured that they are not in the business to lose money.

I think there is some price collusion in areas. Not published of course because it is a Anti-trust Violation.

Most salesmen work long hours and get btwn 250-750 per car. Average around 350.

 

You have obviously drank the kool-aid from your dealership, its kind of sad.

Yes, people are selling Tacoma's for that Price. I paid $29 & change for m2012 that MSRP was 33. and i am sure i could have worked out a better deal.

Yes, people pay $40k for a nicely equipped silverado or F-150 and they are nice trucks. There is a reason they are the best selling vehicles in America for the last Century (it seems like).

All im saying is dont take all the crap your dealer feeds you as the word of the lord. They feed you all kinds of BS so you will be more enthusisatic about selling their products. Trust me, I am the guy who got paid alot of money to to feed you that crap.

 

No need to worry about the B.S the dealer feeds me. I hear a lot more B.S from the people across the table from me than I do the people I work for. Trust that. The margins are not as big as some imply.

I have always found it odd.. the person who made a good deal, paid a fair price ( for both partys ) always has a better experiance than the person who ground 12 dealers in 4 states endlessly. That person feels ripped off in the end no matter what they paid... because they had un-realistic expectations to start with.

 

I'd suggest that you venture out of the giant metropolis of Idaho before saying that no one, anywhere has purchased a Tacoma for $28K. I would imagine that some small Toyota dealers - maybe the one you work at - sell 10-15 Tacomas a month, while very large dealers sell many more and make their money on volume. I bet the dealer I bought mine from here in Houston sells 100+ Tacomas a month. If 10% of those are sold at no profit, or even a loss to meet a quota and get a bonus from Toyota they are still making plenty of money.

Also, I bet you would be surprised by how many Chevy or Dodge trucks are sold at full sticker - those buyers aren't the sharpest folks.

 

how long have you been selling cars? I get the feeling that it is a relatively new venture for you.

 

x99999999!

and the customer who grinds and grinds, better not come back asking me for a favor, where as the guy who is pleasant and lets me take a few bucks home to mod my Tacoma, is a guy I'll take care of when he is in for service, parts etc...

it is NEVER a benefit to be an asshole to your sales person.

 

The problem isn't the salesperson. I do think it is unfair that you only get paid on the one portion of the sale. Now if you made a commission of what the dealer truly made then you'd be buying new Tacomas every year, but you don't. Just imagine how much more you'd make if they didn't take out their "pack"? Or you got paid in hold back?

Let me ask you two honest questions -

1- do you really have any pull to do favors (free or discounted stuff) when someone comes in for service? If you do, that's awesome

2- all things being equal, would you pay $150/month for cable TV if you could get the same thing from the next guy for $100/month?

 

No, not a new venture.. but one that never fails to amuze me.

 

Been in Auto Sales for over 17yrs. 15yrs w/ Saturn and now 2.5yrs w/ my New Home, Toyota. I Love what I do, I get to meet great people everyday annnnnnnd some not so great people every so often lol!

I have to say to the one guy that said that we (salesman) make $700 on Tacomas......... OMGROTFLMAO!!!!

The happiest customers are the ones you make a profit on (big or small) and the ones that steal the car are usually....... well I won't say

Oh and one more thing, we (car salesman/dealers) get a bad rep and people think we make alllllll this money on each car. You should do some investigating on the Furniture Business **rolls eyes**

 

Did you mean to say 2WD?
2012 4WD TRD OR DC V6 here and I paid $28,521.00. Take my trade into account and it was exactly $26,114.27 out the door. Seems like not only is 28k for a 2WD realistic but a 4WD as well.

 

I like that... "Drank the look-aid"

I wish I would have read this prior to posting my last ^^

 

How long have you been selling cars?

 

I have been in the business since 2001.
The dealerships DO NOT make a ton of profit on new cars like most people think.
I work for KIA now and our profit margin is $700-$1800 per vehicle at MSRP depending on what car you get. Most people do not pay MSRP either because of computers and competition.
They make the extra money on -Servicing your vehicle, -Finance (aka F&I selling extra warranties), -up to 2 points off the interest rate, -and car allocation.
Running a dealership is super expensive and complicated!! We have $200,000 in overhead every month here in Irvine.

Even if we are making $2,000 a car (which we are not) you would have to sell minimum 100 cars to Just break even!!!!!!

Dont get me wrong, they make money but not $1,000's on every car like most people think. You have to sell volume to do well

 

i had a good friend of the sales manager who hooked me up. i got a 2010 tacoma dcsb prerunner for 3k under msrp. this made me feel better

 

X2

There is no money in the new cars anymore. A good family friend of my dad's always said - "the only reasons I sell new cars is to get my hands on the used ones, sell the finance and service the vehicles"