How Much Do New Car Dealers Really Make On Each Sale

“We Sell At Invoice”; “The Little Profit Dealer”; New Car Dealers Make More on Used Cars Then New”; The Internet Has Eliminated The Profit From F&I (Financing and Insurance)” “We Sell At Cost”; “Invoice Sale” ETC; ETC; ETC.

All the rhetoric and untruths we hear and read and believe concerning franchised new car dealers are cleared up by a compilation of data taken from the public records of the publicly traded auto dealer groups.

These publicly traded groups  have consistently raised both revenue and profits and have done it the old fashioned way…they sell cars for more than they pay for them…which is A-OK as far as we are concerned.

We strongly believe they should make a fair profit, but what bothers us is the continuing misconception that we should feel sorry  for the poor dealer…selling at invoice, not making profit on new cars, having to eek out a living by selling used cars…well you get the idea.

Why is it that car dealer advertising screams how they are practically giving their wares away?  No other honest retailer uses this ploy to get traffic into their establishment.

Apparently the buying public responds to this hyperbole in the car arena and the traditional bait and switch products… “3 rooms of carpet for $89.99”; New windows installed in your home for just $29.99 each” “New Cars below Invoice”.

Why should the second largest purchase a consumer makes be influenced by hucksterism instead of solid product offerings?

Well as an old car salesman I learned that buyers do respond to Bull instead of Facts…so where does this all leave us…I really don’t know…as my partner once said “cars are sold not bought”…and we seem to reward those dealers that scream the loudest and tell us what we want to hear even if it does skirt the truth.

 Public Auto Dealer Groups Gross Profit Per Unit

                                New                          Used                                       F&I         

Bob Gordon, President

The Auto Channel, Inc.