Bradwillia

I'm sorry I just can't see how you can run a dealer with those kinds of margins considering profit on new cars is even lower. If you think about it, a new car profit is probably in the $1200 range and a used in the 2500 range? If you sold 25 new vehicles and 7 used that is a total of $167,500 a month take away cost of running the building, insurance, all the employees, etc. (NOT INCLUDING OWNERS/EXECS WHO ARE MAKING THE REAL MONEY) and you're probably down to $75,000 dollars a month and $900,000 a year left over for the owners, GM, top employes so about $500,000 to the owner. I have known a few Owners of Large dealerships over the years and believe me, $500,000 wouldn't even cover the cost of running one of their residences for a year let alone their vacation houses. I'm just sayin'

elite7

One word - Volume.

They make low margin but sell tons which makes them the money.

Plus keep in mind many dealers take trade ins which they make money off of selling you the car and then some more cash off the trade in. Then there are some dealers who have a finance department and they make money off the interest. Also service brings awesome money too.

Plus they rip on new cars making tons of cash off of those vehicles.

drsaab1

most large dealerships should be selling at least 100 cars per month. carmax sells avg of 300 per month..some do 500. many new car dealers are selling more used than new now. and the way they survive is the service... it does not cost $125 per hour that they charge. i would assume a tech gets paid $25 per hour and a master tech maybe $40 per hour. you could probably run a dealership on a strong service dept itself.

bollywood2

I bought a Lexus LS460 from my local dealership last month. I initially went there 2 months ago to see if I would like the LS460. I was debating between an CLS550 or LS460. At that point, I did not want to pay $40k for another car. Sticker price was $44k. The dealership is very close to my house so I took a look to see if the car was still on the lot. It was marked down and it was in the back of the lot out for bid. It had more miles then I would have liked. I wanted a car under 50k. I got the car for $34k and I felt I got a fair trade-in as well.

07 LS 460, 56k.
certified, navi, front and rear sensors, heat and cooled front seat, rear seats heated with sunshade. I am sure I might have missed some other options. Car came with new set of tires, and already had the major 60k maintenance on it. No accidents and all maintenance done at the dealership.

I love the car and it runs very smoothly. I plan to keep the car for a while.

I agree with others on the blog. If you see a car in low 30s or high 20s. Chances are its banged up, or some other issue.

If you want to get a 07 Lexus with reasonable miles and that has no issues.....you may have to wait until 2011 to get it for under $30k. Either way happy shopping.