Trust me, I know buying a car isn’t easy. Believe it or not, neither is selling a car. After doing it for 43 years, I can assure you that being on either side of a car deal isn’t the most pleasant experience either. This is in large part because of information asymmetry, meaning that the dealer has more information than the car buyer, and the car buyer has most likely been taken advantage of in the past by one dealer or another.
By now you know what our objective here at YAA is: we exist to support car buyers as they navigate the process. Today I wanted to share with you my best guess as to how much dealers make on new cars broken down by brand. These are estimates, and not facts. During my 43 year career I worked for a lot of OEMs (original equipment manufacturers), but not all of them. I don’t know every brands profit margins, but I do have a good sense of what they are for most.
Keep in mind that profit margins are different by model and not just make. What do I mean? I mean that a Mercedes-Benz C300 is going to have less profit built into it’s MSRP than a G550. That being said, on average, my best guess is that Mercedes-Benz’ have eight percent profit built into the MSRP price. I hope that makes sense.
If you work for one of these manufacturer’s, or at a dealership and you have insight into how much profit is built into the MSRP price for each brand, please leave a comment below and we will update the table to reflect that. This is a “living” document, and should be used as a guide for your car buying process, not as fact. The only way to truly know how much a dealer is making when they sell a new car is to ask them. More on that can be found here.
If you haven’t already, be sure to use our FREE Market Price Report which contains a suggested offer price to help you begin negotiations with any dealer on any car.
Without further ado, let’s dive in!
|OEM||Profit built into MSRP|