How Do Car Dealers Make Money?

Car dealers are looking for money from the three primary sources of income within trading. This article describes the basics and provides you with general information on most car items.

1) First Final Profit This is a profit from selling a vehicle. Regardless of whether a vehicle is financed through a loan company, or if you pay cash, the primary profit of trading is not affected. The front profit is the difference between the vehicle's sales price and the actual cost of the dealers. In addition, merchants earn money from the manufacturer's incentives, the "withdrawal" of the trader (the percentage of billing costs paid by the manufacturer to the merchant) and the discounts if the merchant maintains it. The front profit is what the car dealer pays for their responsibility, which is usually 25%, which the industry called "gross".

2) Back end result This profit comes from the financing of vehicle sales, along with various financing products. These include Gap Insurance, Extended Car Warranty, Credit Life Insurance, extended service contracts, and prepaid service plans. Cost of interest rates and other financial products. The dealer will raise the price of each and the difference is similar to the merchant's financial department's profit. Financial managers generally pay salaries and a 5-10% commission on the sale of back financial products.

3) Service Department If a new vehicle is covered by the warranty and is welcomed to improve the warranty, the merchant will be charged by the merchant for work and part costs. In addition, if used vehicles are sold through a dealership and ready for sale, these costs will be charged by the used car class and paid to the service department. These fees will become part of the used car parts to the cost of the vehicle. The profits of its service department in many new car dealers have outperformed front and rear profits.

This is a general explanation of how car dealers earn money.

Source by visit sbobet thailand

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