profit margins

[beckly car sales 1]

Hi,

still looking for a premises after being knocked back by the landlords of the unit i wished to rent.Looking at storing cars at home then working from an office for appointment only viewings etc.

I know this is a big question but what would be an average gross profit on a 5 / 6 k car these days, a rough amount to add on car bought correctly at auction?

thanks

[Mark101 536]

 

Simply impossible to answer.  I have a figure I aim at, sometimes I lose, sometimes I win, sometimes I break even - just work towards your target by using retail back.

[beckly car sales 1]

Yes i was expecting an answer or two like that, but there must be an average figure that people work to ? Is 800 out of the way ?

[NOACROSS 414]

1 minute ago, beckly car sales said:

Yes i was expecting an answer or two like that, but there must be an average figure that people work to ? Is 800 out of the way ?

Hi Beckley. Depends on how good you are at buying and how much of the prep etc you farm out or do yourself etc and the list goes on  

You’ll struggle I’d wager to get the answer you’re looking for on here as a newbie. 

To give yourself an idea of what you can buy and sell a car for, there are various guides (free or otherwise). Autotrader have a fee one as do Hpi. 

[beckly car sales 1]

Yes was thinking of using cap, when i did cars from home 30 years ago i was nicking 450 a car on average, but obviously its all changed....

[Mark101 536]

8 minutes ago, beckly car sales said:

Yes i was expecting an answer or two like that, but there must be an average figure that people work to ? Is 800 out of the way ?

OK, let me put it an easier way - you want £800 (not enough gross IMO but let's use that).

Retail £4995

Margin Target £800

Buyers fees £250

Transport £100

Valet £50

MOT £30

Servicing £200

Paintwork £200

Advertising £50

+ any other costs

Maximum Bid = £3,315

The answer is IT IS ALL IN THE BUYING

[NOACROSS 414]

 

5 minutes ago, beckly car sales said:

Yes was thinking of using cap, when i did cars from home 30 years ago i was nicking 450 a car on average, but obviously its all changed....

My old man was making a grand a car in the early 80’s and if they had it a week it was a ‘bottler’. Shelling peas  

It’s much tougher now, especially the potential pitfalls. Start slow and feel your way is the best advice I can give.

Good luck and keep us posted. 

[It's me 611]

2 minutes ago, Mark101 said:

OK, let me put it an easier way - you want £800 (not enough gross IMO but let's use that).

Retail £4995

Margin Target £800

Buyers fees £250

Transport £100

Valet £50

MOT £30

Servicing £200

Paintwork £200

Advertising £50

+ any other costs

Maximum Bid = £3,315

The answer is IT IS ALL IN THE BUYING

wish i could attain those low costs

can i have your sources

[Rory RSC 596]

I usually work to Autotraders suggested profit margin of £150 / £200 per car. Anything else is just greedy to be honest.

[Mark101 536]

Just now, Rory RSC said:

I usually work to Autotraders suggested profit margin of £150 / £200 per car. Anything else is just greedy to be honest.

That's how you sell 40 per month 

[Nick M.K. 574]

What Rory said. 

[It's me 611]

i usually work for a bowl of soup and like to get a good kicking once a week

i know my place

[Tom 164]

17 minutes ago, Rory RSC said:

I usually work to Autotraders suggested profit margin of £150 / £200 per car. Anything else is just greedy to be honest.

As much as that?! Damn I'm doing it wrong. 

[Mark101 536]

54 minutes ago, jason doyle motor sales said:

i usually work for a bowl of soup and like to get a good kicking once a week

i know my place

[justina3 518]

1 hour ago, beckly car sales said:

Yes i was expecting an answer or two like that, but there must be an average figure that people work to ? Is 800 out of the way ?

Nope there is no average. 

[EPV 631]

I think everyone wants to know this before starting out don't they? How realistic is xyz per car? How many cars can I sell a month if I set my margins to xyz? 

It's understandable but firstly, no one ever openly discusses margins in public for several reasons, most of them rather obvious. A less obvious one being that if you are pulling good money from nearly every car then people don't believe you. So it's best to find your own way, be happy with what you're getting and don't be bitter and jealous of those that are doing better than you and try to find ways of increasing your margins if you're not happy with what you're getting.

But £800 gross on a £6k car isn't particularly ambitious and to be honest, likely to lead to disappointment long term unless you're doing serious volume. Advertising, VAT, Tax etc will catch up with you and that's before you account for prep, warranty claims, the odd refund and some good old fashioned sticky cars that won't move no matter how many of their legs you chop off.

[MattR 177]

1 hour ago, EPV said:

I think everyone wants to know this before starting out don't they? How realistic is xyz per car? How many cars can I sell a month if I set my margins to xyz? 

It's understandable but firstly, no one ever openly discusses margins in public for several reasons, most of them rather obvious. A less obvious one being that if you are pulling good money from nearly every car then people don't believe you. So it's best to find your own way, be happy with what you're getting and don't be bitter and jealous of those that are doing better than you and try to find ways of increasing your margins if you're not happy with what you're getting.

But £800 gross on a £6k car isn't particularly ambitious and to be honest, likely to lead to disappointment long term unless you're doing serious volume. Advertising, VAT, Tax etc will catch up with you and that's before you account for prep, warranty claims, the odd refund and some good old fashioned sticky cars that won't move no matter how many of their legs you chop off.

Agree with all of the above. You're not being unrealistic at £800, which the cap figures on an auction catalogue (clean to retail) would demonstrate. its making it profitable after VAT, advertising etc thats tough. But find your niche and what works for you.

[Blenheim Car Sales 111]

Your getting it wrong its NOT buy it and add £800 margin on..............................  its as already been said Find what the  marketplace says the car is  going to retail for then its work out every single likely cost then minus your £800 margin and then you are left with a maximum hammer price purchase figure.

 

doing it any other way is financial suicide, you make your money by smart purchases not smart selling

 

 

[beckly car sales 1]

7 hours ago, jason doyle motor sales said:

wish i could attain those low costs

can i have your sources

yep, i did realise that,is hpi retail price reliable?

[Bagheera 2]

7 hours ago, Mark101 said:

OK, let me put it an easier way - you want £800 (not enough gross IMO but let's use that).

Retail £4995

Margin Target £800

Buyers fees £250

Transport £100

Valet £50

MOT £30

Servicing £200

Paintwork £200

Advertising £50

+ any other costs

Maximum Bid = £3,315

The answer is IT IS ALL IN THE BUYING

Thanks for posting this, I found it really helpful.

[sellect2 19]

OK, let me put it an easier way - you want £800 (not enough gross IMO but let's use that).

Retail £4995

Margin Target £800

Buyers fees £250

Transport £100

Valet £50

MOT £30

Servicing £200

Paintwork £200

Advertising £50

+ any other costs

Maximum Bid = £3,315

The answer is IT IS ALL IN THE BUYING

 

 

didn’t you forget the Vat??

Means you need to buy for sub £3000 (then £330ish of VAT). 

[Bagheera 2]

1 hour ago, beckly car sales said:

yep, i did realise that,is hpi retail price reliable?

My first impression is yes, it seems reliable.  Just checked a few and then checked on ebay and it seems about right. Need to check a few more though to be sure...  

Edited May 7, 2019 by Bagheera

[Mark101 536]

31 minutes ago, sellect2 said:

OK, let me put it an easier way - you want £800 (not enough gross IMO but let's use that).

Retail £4995

Margin Target £800

Buyers fees £250

Transport £100

Valet £50

MOT £30

Servicing £200

Paintwork £200

Advertising £50

+ any other costs

Maximum Bid = £3,315

The answer is IT IS ALL IN THE BUYING

 

 

didn’t you forget the Vat??

Means you need to buy for sub £3000 (then £330ish of VAT). 

Yes, well spotted 

[Axiom 2]

This is really useful.

I've also added in £150-200 for self-administered warranty costs.

[Blenheim Car Sales 111]

and yet all customers think you still have £2000 margin to allow for there £1000 discount on a £5000-6000 car