porscher

what amounts to dealer margin?

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Hello

What part of price of a car amounts to dealer margin ? How much money a dealer makes on sale of each car ? Does it differ from manufacture to manufacture? Is it different among different segments of cars ?

What you people think ? Kindly enlighten.It will help many buyers bargain the price when making a purchase.

Thnx in advance .

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Very good thread Porscher, I had put up a similar query in some thread long back, probably lost somewhere now.

Dealers make good profits on sale of cars, but maximum returns come from aftersales service & accidental cars.

Somebody in close proximity to dealers or himself running an agency would be able to comment correctly. But my guess would be ~ 25-45K/car(midsize category) could be more or less though, this is just my assumption.

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Dealer margin varies among brands. Popular brands offer less margin especially for their hot selling models. In such cases the huge volume of sales brings in more profit. Dealers get quantity discounts for sales target achievements for particular periods. Companies offer more margin for slow moving models and also in dull seasons. Anyway most of the dealers transfer these margines to the customers in forms of discounts, free accessories  exchange bonus etc. to clear out the stocks. The main profit is from after sales service definitely and also some dealers rob the customers through unfair tactics.

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We bought Tata Indigo XL Grand Dicor in May 2007.

There are two dealers in our city, Solapur, viz., Chavan Motors and Sterling Motors. Before buying, when I enquired at Chavan Motors, they quoted me Rs.8,57,XXX/- and Sterling Motors quoted me Rs.8,22,XXX/-. The Chavan Motors quoterd me Rs.35000/- more for same variant. We purchased car from Sterling Motors.

 

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@Sudeep, 35000/- diff. is huge, the dealer was trying to take you for a ride! These dealers are very greedy, one should try & verify the true prevailing price at the time of purchase from the company directly through the Website.

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IIRC, My best friend, who was earlier working for Volkswagen dealership in Delhi , told me that dealer margins are huge on the VW Passat. It is about a whopping 3 lacs per car the dealer sells.

Even the sales guy gets about 80-85 k per Passat sold.

But on the Jetta its about 85,000 - 1 lac per vehicle sold for the dealer.

The dealer earlier was selling a major manufacturer in Delhi, but said that profits are getting lower on those & there was a lot of interference by the company. So they shifted to Volkswagen.

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Very goo info. Car crazy. 3L is a huge amount & 80k to the sales guy!!!

But both Passat & Jetta are not only selling! So, maybe the high margins to compensate the dealers, but it could be otherwise too in such a scenario, low selling cars are discounted heavily which cuts the dealer margin too.

 

Try & get some info. about other Companies- Maruti/Hyundai/Skoda,etc. if you can.

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