Cars Trucks

How much do car dealerships actually mark up new cars & trucks?

My question comes from a conversation with friends over the government bailout of the automakers. One of my friends used to be part owner in a GM dealership that went down a few years ago. He said that the dealership would usually get an invoice from the manufacturer that would include at least a 50% mark-up. There would also be a MSRP sticker posted on the vehicle that would have a 100% mark-up on the price that would give the dealer plenty of room for haggle and still make a strong profit. So,,,,, what is the truth?

It varies as to the demand for the car. The markup is a closely guarded secret. Several years ago, when Suburbans were selling for $30k, the dealer was clearing about $10, per sale (that’s profit after expenses). So, 30% is not unusual (to me).

The dealer can show you his invoice. I put on an invoice ANY price I want you to see. Their invoice paperwork isn’t worth the paper it’s written on. I’m not sure Consumer Reports get’s honest information from the manufacturers.

The dealer’s objective is to get the most he possibly can from the customer. The customer’s objective is to get the price of the car down as low as he possible can. I’ll guarantee you, the customer loses every time. There are add-ons after the negotiated price that jacks it back up to the original asking price (dealer prep, shipping, doc fees, and any imaginative fee the dealer can think of – floor space fee, economic recovery fee, mistress fee).

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