CARS

[lumberjim]

As some of you know, I am the Finance Manager at a Chrysler/Jeep dealer in SE PA. Since most people drive, and many people have questions about cars, I'm here to help. Got a question? Need advice? Or do you just want to make fun of me for being in the car business? Have at it!

SEE ALSO FINANCING YOUR CAR and WARRANTIES AND SERVICE CONTRACTS

[FileNotFound]

Do you make more money on new cars or used cars?

[lumberjim]

on the sale of a car, (front end) almost always on used. on financing(backend), usually used, and on warranties, about the same, although the cost is higher for used car warranties.

my month generally goes as the used car department goes.

[FileNotFound]

So how much do you mark up the used cars? Given a car which would break even at 15k, how much would try list it for and let it go for?

(Yay 500 posts)

[lumberjim]

most used cars get marked up to $**,995....so, depending on what the actual cost is, there can be somewhere between 2,000 and 3500 mark up. that's the norm...sometimes, we get a car really cheap, and we price it at market value, which may create more than the above profit. sometimes, you stretch on a trade to make a deal, and the mark up is considerably lower....our average gross profit on a used car is around 1800/copy.

[FileNotFound]

So it's not % based?

Like a 10k car goes up to 11k a 15k to 16.5k...

[lumberjim]

nope. at least, not at any dealership i've worked at.

[dar512]

What percentage of trade-ins do you keep to sell at your dealer? Don't some get sold off wholesale, or traded to other dealers or some such?

[lumberjim]

Originally posted by dar512
What percentage of trade-ins do you keep to sell at your dealer? Don't some get sold off wholesale, or traded to other dealers or some such?

56.2% of our used.......

sorry.

dar,
it depends entirely on the car in question. we tend to stock our make of vehicles. People go to a dealership because of the brand of new cars they sell . It makes sense, then to stock the same type of cars on the used lot, so that when someone doesn't want to sacrifice 5 to 6 thousand in the first year's depreciation, or can't afford new, they can be switched to newer, excellent condition used cars. Also, we have access to lease returns, closed auctions, and floor plan accounts from the manufacturers financial arm.

Floor plan is like a revolving car loan on a very large scale that the dealer uses to finance the cars on their lot untill they sell. They then pay the amount "floor planned" off with the "funding" of the customer's bank contract, or cash.

We have two main wholesalers. One guy buys anything from a 91 Lumina to 03 Porsche to a Harley Davidson Motorcycle. He places cars at other dealerships. we buy jeeps from him occasionally. He's got it going on.

The other deals mainly in "sleds" .....older cars that he then takes to those little shady looking used car lots that do such a service to our industry's image.

[Elspode]

Okay, so, now that I'm armed with the article that Bruce posted, which sort of dealership are you at now, LJ? Haggle or no-haggle?

[lumberjim]

I got to page 5 before my eyeballs dried out last night. My dealership is of average size. the one from those articles was a superstore. 85 salesmen, fingerprinting, drug tests? yikes. the articles i read smacked of an in depth interview told in the 1st person for dramatic effect. I don;t believe he really worked there. But, to answer your question, we are a haggle store. BUT....we do not fuck around with people like that guy describes....the 4 square method...old school.....it's all menu selling now. We ask the customer to buy it for list price, then they say" no", then we say, "what do i have to do to put you inthis car today?" blah blah blah. and, at the end of the day, the customer gets a better price than he would have at the no haggle place where they helped us sell this guy a car by giving us a number to work against.

[xoxoxoBruce]

chatter

[Kitsune]

Lumberjim -- I assume you sell more automatics, but is there a percentage of people that buy sticks these days? Does the dealership even get many of them in, anymore?

[lumberjim]

depends a lot on the car in question.

wranglers are probably the highest percentage of 5 speeds among american cars, i'd guess...
we usually stock 60% 5speed

you can;t get it even if you want it in a grand cherokee...

liberty's ...we might sell 10 manual trannys a year.

20% on the cruiser....

1% sebring convertible gtc

n/a on anything else.......and i've always wanted a 5 speed minivan.

they DO, however offer something called "autostick" in many of the highline sedans like the 300M

it works like a tiptronic, if you're familiar with that....if not, it's a fully functioning automatic transmission, with a side to side option that allows you to shift the transmission manually like a 5 speed. tap left, shift down, tap right, upshift......it has safing sensors to prevent over or under revving......it's not the same without the 3rd pedal, though......i like a 5 speed when i can get one....

when it starts to warm up, i'll be back into a wrangler and start re-trainng my clutch muscle. i have a liberty renegade at present, and it's cool, but i miss the wrangler......

[wolf]

Originally posted by Kitsune
Lumberjim -- I assume you sell more automatics, but is there a percentage of people that buy sticks these days? Does the dealership even get many of them in, anymore?

The only reason I'm not driving stick currently is that the current wolfmobile, which was an incredible deal, isn't even MADE in stick.

I went to one dealership (Chevy) and told the guy I was looking for a manual tranny. He laughed at me and said he couldn't imagine anyone wanting one.

Funny, I said, I can't imagine buying a car at your dealership.

See yah.