Quote:
Originally Posted by Leopard2
I looked up the used car I wanted buy under the feature "What is my car worth" on KBB and Edmunds. I figured this has to be close to what the dealer paid for the car. What I've found is dealers are selling cars for 20% more than this price! This is quite a mark up plus they try to slip in the "Dealer Assistance" fee for $649.
What is an appropriate profit margin for a dealer to make using KBB as a starting point?
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The appropriate profit margin for a dealer is of no concern to you.
The KBB or Edmunds value isn't the end all and be all of what the car cost the dealer. If they buy it at auction they have to pay auction fees, transport of the vehicle back to the store, and an inspection and repairs. A $15K auction car adds another $3-400 in auction fees, $2-400 to transport back to the store, 2-3 hours of tech time to do an inspection, and then parts to fix anything they find.
What you should care about is how much you pay. You can do research on how much dealers are asking for similar vehicles including CarMax to get a feel. Use the online guides as well to get more information. You can also post at the forums at Edmunds in a thread called "real world trade in values" where a number of posters in the industry use auction info to give you an idea.