2nd Hand GTI - Good Value?

[Guzzle]

Presumably though, you will have costs on top of that £600 profit though if they're cars traded in that are going into stock;-

Cleaning/valeting
Minor repairs
Garage/forecourt overheads
Sales incentives/commission
VAT etc

[P6GTD]

.......and if you buy VW DVA you get a 1 year warranty plus 14 day exchange and sometimes a service, new tyres if below a certain limit, etc, etc.
I have always found reassurance buying used Golfs this way. I guess enough others feel the same especially with performance models.
Everything comes at a price. It’s a free market and if you don’t like what’s offered you can just walk on. Dealerships are not charities and everyone needs to make a bob in this world.

[Jim_mk7.5]

Not sure if this helps but my oct 2015 3door GTI PP with 42k on the clock was up for just under £20k in January. It had VWSH plus interim services every 5k. It had all the options apart from the sunroof and 19inch wheels. It also had the balance of the 5 year factory warranty remaining.

What 5 year warranty is this, an upgrade done?

[mcmaddy]

Never done a 5 year factory warranty it was a paid additional warranty bought either when ordering or once the car had arrived. Sure it replaced the third year with the additional three.

[fredgroves]

The average profit on a used car at our dealership and pretty much across our entire group is between £400-£600.

That's got to be net profit, factoring cost of sales, warranty purchase etc

If not, then its a business hardly worth doing...

Either that or you sell a lot of sub £3k cars.

I'd expect to see a gross margin of 20% minimum for any business that's still going to be trading in a years time.

[davyk31]

Dealers don’t make any money on new cars and don’t make any money on used cars so you wonder why they bother! Dealers look at thing very much in the average and put silly amounts of refurb costs against every vehicle, some will need money spent and others won’t and therefore are much more profitable. For example my local BMW dealer put a 2k allowance against every trade in for cleaning and refurb, my cars were immaculate therefore didn’t even need cleaning so the 2k was simply extra profit. For that reason their offer to me was too low and I sold the car elsewhere for generally at least 2k more.

[dubber36]

There are a lot of wages to pay in main dealers. Those preened people that take one piece of paper from one office to another and back again don't come cheap.

[Arnold_Lane]

The average profit on a used car at our dealership and pretty much across our entire group is between £400-£600.

That's got to be net profit, factoring cost of sales, warranty purchase etc

If not, then its a business hardly worth doing...

Either that or you sell a lot of sub £3k cars.

I'd expect to see a gross margin of 20% minimum for any business that's still going to be trading in a years time.

Also consider that they might have made a good profit on the car they sold for which they took that px in and that a finance deal might have been included too.
So if you take just one car in isolation it might not look like a large profit, but considered over the whole dealership and throw in manufacturer incentives and that profits probably vary from one deal to the next, and overall they make a decent profit. Probably fits Pareto's Law (80/20) in fact.

[fredgroves]

Yes but these businesses have been around for a long old time usually.... I'd not expect to see tiny profits on the capital they have in premises, stock, tooling etc. If I had 3 million in capital, I'd want to see it work harder than returning percentages I could get safely and predictably with a financial product on my capital.

Probably though, second hand car retail is just a small element of their business. New cars and service (particularly service) will be where the real money is.

I'd expect a used car only sales operation to be slim pickings.

[Arnold_Lane]

I'd expect a used car only sales operation to be slim pickings.

I'm not sure about that given the likes of WBAC and all the others that seem desperate to buy your used car off you. The likes of Fords of Winsford and the like have grown and expanded quite considerably over the years.