How Much Do Car Dealers Make?

Mike Dickson

Mike is a motorsport enthusiast and has owned a wide variety of sport and luxury cars. He attended the Porsche Performance Driving School at Barber Motorsport Park in Alabama and also enjoys motorcycle riding and racing.

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2 Responses

  1. adam fout says:

    This is extremely helpful! I had no clue about how dangerous the financing portion could be or how they made a profit there. So do you recommend going into your bank or credit union first and getting approval for a loan before walking into a dealership? Also, is Kelly Blue Book a good place to start when researching the price of a used vehicle?

    • Mike says:

      Hi Adam! I’m glad you found this information helpful. As a rule, I always recommend looking into at least one credit union and at least one big bank. Usually, you can get pre-approved pretty quickly and it will give you a good starting point before going to the dealership. As far as pricing goes, KBB is a good option, but dealerships will always say they use “Black Book” value, which is industry talk for “secret pricing software”. An easy way to value a used vehicle in your area is to hop on a site like Autotrader and set the search parameters to only reflect the same car, with the same options and average the prices. Sites like Cargurus will tell you if the price is fair, good or overpriced. I hope this helps and good luck!

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